It has now been widely reported that Hostess Brands, a legendary icon of the snack industry and a beloved maker of such childhood favorites as Twinkies, Ding Dongs, Ho Ho’s and Snoballs, will soon shut its doors forever. The cause? A nationwide strike that has crippled production at the company’s 33 plants around the country.
Though Hostess was able to reach a contractual agreement with the Teamsters Union, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union remained on strike over wage and benefit concessions the company had sought in contract negotiations. So now the 18,500 employees of Hostess will find themselves jobless headed into the Holidays in a bad labor market with difficult job prospects. Once again Big Labor chooses to cut off its nose to spite its face.
Hostess will enter Chapter 11 bankruptcy due in part to the strike and also in part because of increased labor costs. Increased labor costs, something many small business owners can relate to, are a serious challenge to American companies competing in a global economy. Coupled with stagnant sales, concerns about federal tax increases and forced unionization of smaller and smaller businesses, many employers are reluctant to hire or expand.
As private sector union participation continues to shrink, Big Labor has grown increasingly aggressive in its efforts to change the rules of union organization in the hopes of breathing life into an outdated and withering business model. The fear of many small employers is that forced unionization through manipulation of federal policy and rules will be a key component of President Obama’s second term. After all, Big Labor spent a lot of time and resources in the 2012 elections and they will want to see a return on that investment.
Now it is entirely plausible that some other company will snatch up iconic product lines like the Twinkie or Wonder Bread and some people may never know the difference. But for job creators and entrepreneurs this latest move by Big Labor sends another message that businesses and employees are better off working together without the disruptive and recalcitrant tactics of unions.
Of Note: Georgia Tipsheet is reporting 586 Georgians will also lose their jobs at a plant here in the Peach State. Thanks again Big Labor.